Research › Browse › Judgment

Calcutta High Court · body

1995 DIGILAW 423 (CAL)

W. B. Chemical Industries Ltd. v. Modern Food Industries

1995-11-29

Satyabrata Sinha

body1995
JUDGMENT Satyabrata Sinha, J.: An application has been filed for vacating the orders of stay dated 6.9.95 and 12.9.95 passed by a learned Single Judge of this Court. 2. Mrs. Mukherjee appearing on behalf of the applicant/respondent No. 4 in support of the application has principally raised two questions learned counsel firstly submits that having regard to the facts of the case it would appear that no part of the cause of action has arisen within the territorial jurisdiction of this court learned counsel points out from the tender notice which is contained in Annexure 'E' to the application for vacating that tender was issued from New Delhi. Clauses 3 and 6 of the said tender which read as follows: "3. Eligibility of tenderers: Tenders are invited only from firms who are actually engaged in the manufacture of Calcium Propionate and who can undertake the supply within a reasonable period of receipt of supply orders (see Clause 9). Tenders submitted by commission agents/traders/intermediaries or those having no manufacturing capacity of their own for supply of the same will not be considered. Tender form obtained from the company on payment will only be considered. 6. Last date of receipt of tenders: The tenders will be received by the Company upto 1400 hrs on 24.5.95. The tenders will be opened at 1500 hrs. on the same date at the address mentioned above, in the presence of those tenderers who are present on the spot. Tenders received after 1400 hrs. on 24.5.95 shall be ignored. The Company shall not entertain any complaints for late receipt of tenders due to any reason." 3. It would also show that the said tender would have to be submitted at New Delhi. Learned counsel further points out that there exists an arbitration clause as contained in clause 22, from a perusal whereof it appears that all arbitration and court cases relating to disputes arising out of the contract, the territorial jurisdiction would be at New Delhi or Delhi. Learned counsel, therefore, relying on or on the basis of the decision of the Supreme Court of India in the case of Oil and Natural Gas Commission vs. Utpal Kumar Basu & Ors., reported in (1994) 4 SCC 711 , the decisions of this Court in the case of S. S. Jain & Co. & Anr. Learned counsel, therefore, relying on or on the basis of the decision of the Supreme Court of India in the case of Oil and Natural Gas Commission vs. Utpal Kumar Basu & Ors., reported in (1994) 4 SCC 711 , the decisions of this Court in the case of S. S. Jain & Co. & Anr. vs. Union of India & Ors., reported in 1994(1) CHN 445 and in the case of In re: Rajendra Prasad Agarwal, reported in 99 CWN 307, submits that this court should not entertain the writ application at all. Learned counsel further submits that if this court has no jurisdiction, the interim order passed by this court is a nullity and reliance in this connection has been made in the case of Board of Trustees, Calcutta Port vs. Bombay Flour Mills Private Ltd. & Anr., reported in 1994(3) AIR SCW 4855. It is further submitted that even in this case the records of the case are lying at Delhi, and in that view of the matter, this court cannot issue any Writ of Certiorari. It is further submitted that in any event, the petitioners having opted for submitting themselves to the jurisdiction of the court at Delhi, are estopped and precluded from contending that this court has jurisdiction to entertain this writ application. Relience in this connection has been placed in the case of A.B.C. Laminart Pvt. Ltd. and Anr. vs. A.P. Agencies, Salem, reported in AIR 1989 SC 1239 . 4. Mr. Mukherjee appearing on behalf of the writ petitioners, however, submits that the petitioner No. 1 company is a Government of West Bengal Undertaking and it had been receiving contract for supplying a chemical known as Calcium Propionate for the last 9 years on the basis of negotiations after the tenders were opened. According to the learned counsel, the tender was submitted on 24.5.95 and the negotiation was to be held on 20.6.95, but in the meanwhile on 22.6.95 a letter by way of Fax was sent by one Mr. According to the learned counsel, the tender was submitted on 24.5.95 and the negotiation was to be held on 20.6.95, but in the meanwhile on 22.6.95 a letter by way of Fax was sent by one Mr. Sharad Yadav, Member of Parliament addressed to the Minister-in-Charge of Public Undertakings, Government of West Bengal, in terms whereof it was suggested that the petitioner No. 1 being a public sector undertaking should not quote a price below the cost of price pursuant whereto comments were sought for by the State of West Bengal and the petitioners replied thereto in terms of its letter dated 3.7.95. Learned counsel contends that in this background the negotiation was cancelled and the tender of the applicant Messrs. Calpro Food (Pvt.) Ltd., was accepted. It is submitted that this court has territorial jurisdiction in view of the fact that the conspiracy was hatched as against the petitioner, a part whereof took place in Calcutta, in as much as, while forbidding the petitioners from attending the negotiation, behind its back the tender of the applicant/respondent No. 4 was accepted. 5. Mr. Chowdhury appearing on behalf of the respondent Nos. 1 to 3, however, submits that in the instant case the arbitration clause shall apply, and in support of his aforementioned contention has relied on a decision of Delhi High Court in the case of M/s. Raipur Alloys & Steel Ltd. vs. Union of India, reported in AIR 1988 Delhi 53. Learned counsel poins out that from the writ application itself it would appear that the writ petitioners had been lowering the rates to a great extent and keeping in view the fact that negotiations used to take place by way of exception and not as a matter or rule, and further in view of, the fact that this time the company received a legal advice that no such negotiation need be taken recourse to, the tender of the applicant Messrs. Calpro Food (Pvt.) Limited was accepted. It is submitted that the allegation of conspiracy as against the respondent Nos.1 to 3 has no substance at all. 6. In this case, there cannot be any doubt that the entire cause of action arose outside the territorial jurisdiction of this court. Tender was floated from Delhi. Tender was to be submitted at Delhi. It is submitted that the allegation of conspiracy as against the respondent Nos.1 to 3 has no substance at all. 6. In this case, there cannot be any doubt that the entire cause of action arose outside the territorial jurisdiction of this court. Tender was floated from Delhi. Tender was to be submitted at Delhi. The petitioners also submitted its tender at Delhi, and as noticed hereinbefore, by reason of clause 22.2 of the tender document, all arbitration and/or court cases were to be litigated as Delhi. It is now beyond any cavil of doubt that in terms of s. 28 of the Indian Contract Act, if one or more court has jurisdiction to entertain a suit, and if by consent of parties, jurisdiction is conferred on one court, the same would be a valid piece of contract. •Reference in this connection may be made to AIR 1980 SC 1239 (supra). 7. For the purpose of invoking the territorial jurisdiction of this court in terms of clause (2) of Article 226 of the Constitution of India, the entire cause of action and/or a part thereof must arise within the jurisdiction of this court. Only because the petitioners have their office or factory at Calcutta that does not mean that a part of the cause of action has arisen within the jurisdiction of this court. Moreover, the petitioners even in the writ application have not stated that the records of the matter are lying within the jurisdiction of this court. In fact, keeping in view the fact, as noticed hereinbefore, there cannot be any doubt that all the records in connection with the matter in question are lying outside the jurisdiction of this court. Only because the Modern Food Industries has one of its offices at Calcutta, the same by itself would not give rise to a cause of action, in as much as, there is nothing to show that the said office has anything to do with the tender in question. In (1994) 4 SCC 711 (supra), the Apex Court held as follows: "From the facts pleaded in the writ petition, it is clear that NICCO invoked the jurisdiction of the Calcutta High Court on the plea that a part of the cause of action had arisen within its territorial jurisdiction. In (1994) 4 SCC 711 (supra), the Apex Court held as follows: "From the facts pleaded in the writ petition, it is clear that NICCO invoked the jurisdiction of the Calcutta High Court on the plea that a part of the cause of action had arisen within its territorial jurisdiction. According to NICCO, it became aware of the contract proposed to be given by ONGC on reading the advertisement which appeared in the Times of India at Calcutta. In response thereto, it submitted its bid or tender from its Calcutta office and revised the rates subsequently. When it learnt that it was considered ineligible it sent representations, including fax messages, to EIL, ONGC, etc., at New Delhi; demanding justice. As stated earlier, the Steering Committee finally rejected the offer of NICCO and awarded the contract to CIMMCO at New Delhi on 27.1.1993. Therefore, broadly speaking, NICCO claims that a part of the cause of action arose within the jurisdiction of the Calcutta High Court because it became aware of the advertisement in Calcutta, it submitted its bid or tender from Calcutta and made representations demanding justice from Calcutta on learning about the rejection of its offer. The advertisement itself mentioned that the tenders should be submitted to EIL at New Delhi; that those would be scrutinised at New Delhi and that final decision whether or not to award the contract to the tenderer would be taken at New Delhi. Of course, the execution of the contract work was to be carried out at Hazira in Gujarata. Therefore, merely because it read the advertisement at Calcutta and submitted the order from Calcutta and made representations from Calcutta would not, in our opinion, constitute facts forming an integral part of the cause of action. So also the mere fact that it sent fax messages from Calcutta and received a reply thereto at Calcutta would not constitute an integral part of the cause of action. Besides, the fax message of 15.1.1993, cannot be construed as conveying rejection of the offer as that fact occurred on 27.1.1993. We are, therefore, of the opinion that even if the averments in the writ petition are taken as true, it cannot be said that a part of the cause of action arose within the jurisdiction of the Calcutta High Court." 8. We are, therefore, of the opinion that even if the averments in the writ petition are taken as true, it cannot be said that a part of the cause of action arose within the jurisdiction of the Calcutta High Court." 8. Following the aforementioned decision, a learned Single Judge of this Court in 99 CWN 307 (supra) categorically held as follows: "Be it noted further that Metal Scrap Trade Corporation, though, has office at Calcutta, but that does not mean and imply that this Court will have jurisdiction pertaining to a tender issued from Vyzag and when the supply under the tender was also to be effected from Vyzag." 9. It is now well settled also that court can exercise its jurisdiction by issuing a writ of Certiorari provided records are lying within the jurisdiction of this court, or a part of cause of action has arisen therein. Reference in this connection may be made to In re: Jyotirmoy Ganguly, reported in 93 CWN 1176. 10. Moreover, it is now well settled that only although a part of the cause of action has arisen within the jurisdiction of this court, the court may refuse to exercise its jurisdiction keeping in view the fact that the cause of action which has arisen within the jurisdiction of this court is a marginal one. Reference in this connection may be made to the decisions reported in 70 CWN 122 and 1994(1) CHN 445 . 11. In view of the findings aforementioned, I do not intend to enter into the merit of the matter not only as regards the allegations made by the petitioners that they have been kept out of negotiation and have been treated unfairly by the respondent No.1, but also the question as to whether in the facts and circumstances of the case the arbitration clause has any applicability in the case or not. 12. For the reasons aforementioned, I am of the opinion that this court has no territorial jurisdiction, and for the reasons aforementioned, the interim order passed by this court is vacated. As this court has no territorial jurisdiction to entertain this writ application, this writ application is also dismissed with liberty to the petitioners to file an appropriate writ application before an appropriate forum for ventilating their grievances. Application allowed, writ petition dismissed.